Unit Surge Powers Sydney Market
Hotspotting
The rise and rise of the unit market is keeping the Greater Sydney market busy, although below the exceptional levels seen in some of the other market jurisdictions across Australia. Unit markets are considerably more positive than house markets in our most expensive capital city and the market share of attached dwellings continues to rise. In our latest analysis, well over half of all residential sales across Greater Sydney are attached dwellings. In most of the Greater Sydney municipalities where sales activity is strong, it’s the unit markets that are most active. Outer ring house...
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Patchy Growth in Regional NSW
Hotspotting
The Regional New South Wales market overall is solid, without excelling at the levels seen in other regional areas like Queensland and Western Australia, but with individual out-performers. There is hesitancy in the Regional NSW market overall. It has a high number of locations where buyer activity is lukewarm and price performance below the levels seen elsewhere in the nation. It’s noteworthy, however, that Regional NSW has seen better performance in its unit markets than its house markets, which is part of a national trend. Overall sales levels have improved, continuing a pattern of...
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Second-Wind Markets: Strategies for Savvy Investors - Webinar Replay
Hotspotting
Are you ready to capitalise on Australia’s next big wave of growth? Join us for an exclusive webinar hosted by Tim Graham of Hotspotting.com.au with special guest Zen Christofi of Reventon as we dive into Second-Wind Markets: Strategies for Savvy Investors. In this insightful session, you’ll discover: What are Second-Wind Markets? Gain a clear understanding of post-boom correction phases and why some markets are positioned for renewed growth. National Overview of Second-Wind Markets Explore key factors driving the resurgence of these markets, from interest rates to housing shortages...
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Million Dollar Hotspots
Hotspotting
Household wealth in Australia keeps rising and the key reason for that is residential property – which accounts for 68 per cent of the total wealth of Australian households. New data from the Australian Bureau of Statistics (ABS) shows that total household wealth has reached $16.5 trillion. Now, that number doesn’t mean much to the average observer, so here are some other numbers that give it some context. That household wealth figure represented a 1.5 per cent rise in the June quarter and the current level of the highest on record. It’s 9.3 per cent higher than a year ago, and it means...
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ANZ's Late Price Guess
Hotspotting
ANZ, the worst forecaster on property price outcomes in the nation, has just published its forecasts for what will happen with house prices in 2024. Yes, that’s right. They’ve published, in October, forecasts for house prices this year, a couple of months before the end of the year. Why have they done this? Because it’s the only chance ANZ has of getting it right with its property price forecasts. Essentially what it has done with these “predictions” is take the existing situation and extrapolate it two months into the future. So, you will be amazed to learn that they’re...
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Unit Surge Unstoppable
Hotspotting
The biggest paradigm-changing trend in Australian real estate, the rise and rise of apartments, is confirmed by the latest price data from the usual suspects – and is reflected in our choices for the latest edition of our most popular report, the National Top 10 Best Buys report. The latest price data from CoreLogic shows that unit prices are rising faster than house prices. While news media, in its predictable fashion, focussed on the perceived negatives in the CoreLogic Home Value Index published in October, my analysis of the figures is that they provide further evidence that rising...
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Mastering Property Management in Today's Market with Corinne Bohan of Image Property
Hotspotting
Join us for an insightful and essential webinar hosted by Terry Ryder, Founder of Hotspotting, and Corinne Bohan, Managing Director of Image Property, as they dive into the crucial role of professional property management in today’s rapidly changing rental landscape. In this engaging session, you'll discover: Building Your Winning Team: Learn why investors must focus on assembling a strong management team before growing their property portfolio and how a first-rate property manager can be a game-changer, especially in the face of evolving regulations. Navigating the Rental Market: Gain...
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Price Predictor Index Spring Edition: Units Thriving
Hotspotting
The new Spring edition of The Price Predictor Index provides emphatic confirmation of the most compelling trend in Australian real estate: the escalating demand for apartments and their challenge to houses on capital growth performance. We have been speaking about the rise and rise of apartments for the past 18 months and there is a growing body of evidence which confirms that more and more buyers are opting for attached dwellings: units, apartments and townhouses. Our analysis of sales activity data for the latest quarter for the Spring edition of The Price Predictor Index reveals that this...
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Canstar: The Dream Is Alive
Hotspotting
Affordability is the most-debated and the most confused issue in residential real estate. While the rental shortage and rising rents occupies the minds of many, the property issue that occupies the most space most often in news media and in the minds of Australian consumers is housing affordability. It has been this way for years, indeed for decades. And while the so-called Great Australian Dream is often declared dead, with young people doomed to a lifetime of renting, the evidence suggests otherwise. I recently finished working on a report with financial comparison website Canstar which...
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The Art of Buying Against the Grain with Arjun Paliwal of Investorkit
Hotspotting
In this episode of the Hotspotting Podcast, Tim Graham sits down with Arjun Paliwal, the Managing Director of Investorkit and a two-time REB Buyers Agency of the Year winner. Arjun shares insights on his unique approach to property investment, focusing on "buying against the grain." Here are some of the key topics discussed: Episode Highlights: Introduction to Arjun Paliwal: Arjun kicks off by talking about his journey in the property industry, how he scaled Investorkit, and the importance of innovation in finding investment hotspots. The Concept of 'Buying Against the Grain':...
info_outlineThere really is no realistic prospect of rental vacancies rising significantly any time soon, which is grim news for tenants in most parts of Australia.
Vacancy rates continue to be close to those historic lows that have become the norm in the past couple of years and I can’t see any way they will improve in the foreseeable future.
The politicians who have created this unprecedented shortage of rental properties are clueless about how to fix their mess – and most of their actions which impact on the situation make it worse, not better.
The latest data on vacancies nationwide – from one of the key sources, SQM Research - has the national vacancy rate at 1.3% in June, the same as it was a year ago. We still have capital cities with vacancy rates well below 1%, including Adelaide, Perth and Darwin.
That June vacancy rate was slightly up on the rate for May, but that’s attributed to seasonal factors.
Here’s what Louis Christopher, managing director of SQM Research and one of Australia’s most experienced and respected research analysts, says about the current situation and about the future of vacancy rates:
“Based on history, we have now reached the peak in rental vacancy rates for Winter. It is likely that, vacancy rates will now begin to tighten again and keep tightening until November.
“So far this year, we have recorded very similar vacancy rates compared to the same period in 2023.
“Overall, the national rental market remains in severe shortage and barring some exceptions, is not expected to materially soften out of the rental crisis for some years.”
So what does this mean for residential rents?
Well, it doesn’t necessarily mean they are going to continue rising at 10% or more per year.
While vacancies are set to remain dangerously low for some time, there is a ceiling beyond which rents can’t rise because to the capacity of tenants to pay.
Louis Christopher says: “Much of the structural rental shortage has now been priced into the rental market and so I do believe the days of 10-20% plus annual rental increases have come to an end.”
I agree. Tenants, who tend to have lower incomes, have had years of rising rents and they can’t keep paying more and more in rent, in times when they’re also paying more for food, electricity, petrol and other essentials.
But the situation of ongoing ultra-low vacancies does mean that rents won’t fall. They will remain at the current high levels for the foreseeable future.